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- Title
Interpreting movements in broad money.
- Authors
Berry, Stuart; Harrison, Richard; Thomas, Ryland; de Weymarn, Lain
- Abstract
Understanding the role of money in the economy has always been an important issue for policymakers. And the pickup in broad money growth and decline in credit spreads over the past three years together with more recent financial market turbulence has made it a particularly pertinent issue. Monetary data can potentially provide important corroborative or incremental information about the outlook for inflation. But understanding the possible implications of money for the economic outlook requires a detailed assessment of the causes of money growth. Such an assessment must recognise the interactions between money and credit creation and the information contained in both price and quantity data. This article provides an overview of the potential channels through which money growth may affect inflation and the Bank's current empirical approach to analysing developments in monetary aggregates.
- Subjects
EFFECT of inflation on the banking industry; PRICE inflation; FINANCIAL markets; MONETARY policy; MONEY
- Publication
Bank of England Quarterly Bulletin, 2007, Vol 47, Issue 3, p376
- ISSN
0005-5166
- Publication type
Article